Power Brokers: Middlemen in Legislative Bargaining
Publication Year
2016
Type
Journal Article
Abstract
We study a model of decentralized legislative bargaining with policy externalities. We establish the emergence of middlemen in legislative bargaining as a robust equilibrium phenomenon. We show that legislative intermediation can impact policy outcomes, and can be inefficient. To fulfill this role, the middleman's policy preferences and bargaining position must be such to make his role of intermediary credible. But the middleman must also directly benefit from policy change. Thus, the political broker is both an intermediary and a client. This result highlights a fundamental difference between intermediaries in politics and exchange economies.
Journal
Journal of Economic Theory
Volume
162
Issue
March
Pages
209-236
Documents